Job building incentives for employers

Apprentice baker shaping a loaf of bread at a bakery

Reducing unemployment is a national priority. While the unemployment rate is expected to decline in 2021, further rises are expected as businesses restructure in response to the pandemic. Wage growth will also be subdued with excess capacity in the market.

New analysis from the Reserve Bank of Australia suggests one in five jobs were saved by JobKeeper. The November 2020 analysis states, “one in five employees who received JobKeeper (and, thus, remained employed) would not have remained employed during this period had it not been for the JobKeeper Payment. Given that 3½ million individuals were receiving the payment over the period from April to July 2020, this implies that JobKeeper reduced total employment losses by at least 700,000 over the same period.”

The number of businesses accessing JobKeeper reduced by around 450,000 in October 2020 with the transition to more stringent eligibility requirements. The shift now is to create jobs, not just keeping them. There are a number of job building incentives for employers to create employment and grow skills:

 

JobMaker

A 12 month “hiring credit” available for jobs created from 7 October 2020 until 6 October 2021 that provides a payment to employers of $200 per week for eligible new employees aged between 16 and 29, and $100 per week for eligible employees aged between 30 to 35 years. Eligibility restrictions apply to the business and the employee. Employees need to have been out of work and receiving Government support for at least one month within the three months before they were hired.

6 January 2021 is the final day of the first JobMaker Hiring Credit period and the deadline for enrolling in the scheme to access payments for this period. While the ATO has the ability to extend this deadline, there has not been any advice on this to date. Enrolments are not open as yet but because of the tight turnaround times, if your business would like to access JobMaker for the first period, it will be important to first assess your eligibility.

The ATO has released an estimator tool for employer clients who are keen to get a feel for the amount of JobMaker payments that their situation will generate. The estimator does not determine eligibility, and the calculated results are based solely on the information provided at the input details section. The ATO emphasises that the exact amount of your JobMaker Hiring Credit payment will be calculated only when you complete your claim form.

We will provide further information on eligibility criteria and how employers can register for the JobMaker Hiring Credit as it becomes available. You can also access further information on the ATO website

 

 

Apprenticeship subsidies

Subsidies of 50% of an apprentice’s wage (up to $7,000) are available for new and existing apprentices to keep them employed. The schemes apply to the wages of new apprentices from 5 October 2020 and 30 September 2021, and existing apprentices from 1 January 2020 to 31 March 2021. Eligibility requirements apply to the business and the apprentice.

In addition, subsidies are available for employers engaging apprentices in key industries with skills shortages including carpenters and joiners, plumbers, hairdressers, plasterers, bakers and pastry cooks, vehicle painters, wall and floor tilers, arborists, bricklayers and stonemasons and air-conditioning and refrigeration mechanics.

There is also additional support for adults reskilling and undertaking an apprenticeship and for apprentices with a disability.

You can see the full list of incentives here.

 

JobTrainer

For individuals, JobTrainer offers those aged between 17 and 24 the ability to upskill or reskill and minimal cost.

If you are aged 17-24 or looking for work, you may be able to study a free or low-fee course through JobTrainer.

JobTrainer will fund around 320,000 additional training places that can help you learn skills for jobs in demand. You can choose from a range of accredited diplomas, certificates and short courses in areas like health, aged and disability care, IT and trades.

The Australian Government is partnering with participating state and territory governments to establish the $1 billion JobTrainer Fund. Training places will be rolled out on a state-by-state basis, starting from October 2020.

For more information on courses and occupations that may be available through JobTrainer in your region, please visit the myskills.gov.au website.

 

State based incentives

Tax breaks to encourage employers to employ more workers are big right now. The Victorian government recently announced a New Jobs Tax Credit for SMEs of ten cents for every dollar of increased taxable Victorian wages. NSW has reduced payroll tax to 4.85% from 5.45% from 1 July 2020. There are also a myriad of incentives targeted to specific areas like the NSW regional growth fund. WA has an Employer Incentive Scheme with a base payment of $8,500 for employing apprentices. It’s worth seeing what is available in your region and in your industry.

 

Further help:

If you would like further advice or assistance to access any of the job building schemes, please contact us and we can assist you to get the best possible outcome. You can reach us on (07) 3023 4800 or at mail@marshpartners.com.au.

You can find out more about working with Marsh & Partners here. As your Absolute.Account.Ability partner we’re on a mission to make your business life better. We’ll help you set goals for your business, devise an Action Plan to make them happen and meet with you regularly to ensure you stay on track.

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